First, let’s look at safety. Normally this is a pretty moot point. Right now everyone is concerned. Is a bank safe or not? I like Jyske from a bank safety point of view because there are four bank safety points, from the top down.
Bank Safety Point #1: A recent Yahoo Canada article shows a survey by the World Economic Forum listed five safest countries in which to bank.
So Denmark is a safe place to bank. Now let’s look at Jyske Bank’s safety rating.
Bank Safety Point #2: Jyske Bank is Denmark’s second largest bank.
On October 10 2008, Moody’s affirmed Jyske Bank’s long-term Aa2 rating stable rating. This decision came despite the deteriorated economic prospects in Denmark, particularly in respect of the property market.
Bank Safety Point #3: Also on Friday 10 October 2008, the Danish Parliament passed a bill that secured all deposits and unsecured claims against losses in Danish financial institutions. The rating of the Kingdom of Denmark is Aaa/AAA with Moody’s and Standard & Poor’s respectively.
Bank Safety Point #4: Finally when you invest abroad, most assets you hold are yours, kept in a depository account. These assets would not be lost even if a bank failed.
So what can Jyske Bank do for you?
Here we must divide services…just a bit…between US residents and citizens versus the rest of the world.
Overseas banks,who are not registered with the SEC cannot provide investment advice or buy certain investments for US clients without potentially incurring the wrath of a number of US regulatory agencies.
Jyske overcame this concern by creating a wholly owned, but independent, subsidiary, Jyske Global Asset Management (JGAM) that is registered with the SEC.
Essentially JGAM can do a bit more for US investors than Jyske Bank can do for non US clients. There are a couple of quirks in this which we will view in a moment.
First, overall, here is what Jyske Bank and JGAM can do. They can:
#1: Offer savings and current accounts in dozens of currencies.
#2: Buy and sell seasoned bonds in dozens of currencies.
#3: Buys and sell shares in dozens of exchanges around the world.
#4: Buy and sell commodities around the world.
#5: Trade in numerous investment contracts, options and derivatives.
#6: Lend in dozens of currencies to hedge or leverage investments.
#7: Provide manage or advisory only accounts.
The managed account service for small investors however is unique for US investors. This is not available to non US investors.
JGAM offers its Managed Accounts (Discretionary Portfolio Management) services to U.S. citizens for as little as $50,000. Each investor has a personal portfolio manager who reviews the personal needs, goals, and risk tolerances and helps create an investment strategy.
Then the portfolio manager writes an agreement outlining how you would like your investments managed. After that, the manager fully manages the portfolio and can act independently within the terms established with the investor.
Once again this managed service is not available for non US investors.
Some investors (like me) want to make their own investment decisions. They can choose an advisory account.
Here is a quirk though. Due to investment regulations, JGAM can buy US advisory clients currencies, commodities, seasoned bonds and US registered securities. They cannot buy overseas non US registered shares.
This imposes a small limitation for advisory investors who want to buy overseas shares that are not traded on a US exchange.
However, since there are thousands of ADRs traded on the New York and American stock exchanges as well as NASDAQ this is not a great limitation.
For example, in the Green Portfolio we track there are five shares. Three of them, Vestas Wind Systems, Kurita Water purification and Seche Environment can be purchased as ADRS.
The codes are: Vestas: VWDRTY
There are thousands of these ADRS so the universe is not small.
Here are three examples of current shares that Jykse recommends to buy.
US advisory clients investors cannot buy these shares direct but can buy the ADRs.
Jyske Bank says of Danske Bank:
Danske Bank’s Q3 accounts were due to low trading income much poorer than expected on the bottom line. The yield spread between government bonds and mortgage bonds was a costly affair during the quarter. On the other hand, the net interest income and fee income were more or less in line with anticipations. Focusing on earnings from the banking business we regard the accounts as slightly below anticipations but not dramatically. We maintain our BUY recommendation.
The ADR code for Danske Bank is DNSKY.
Jyske says about Gazprom: Gazprom’s quarterly accounts were a good deal stronger than expected in the market. In our view, Gazprom bonds are trading at extremely attractive prices in relation to the credit risk, and we therefore maintain our BUY recommendation for Gazprom”s EUR7.8% 2010, EUR 5.03% 2014, EUR 5.44% 2017, GBP 6.58%2013, while we have changed our recommendation for Gazprom”s USD 9.625% 2013 from Sell to BUY
The ADR code for Gazprom is GZPFY.
Jyske says about Novo Nordisk: 2009 outlook will present a very positive surprise! (forecast). We expect strong focus on the 2009 outlook, when Novo Nordisk will on 30 October release its accounts for the first three quarters of 2008. As the market has still not realised the positive effect of the recent exchange-rate development on Novo Nordisk, we recommend investors to buy the Novo Nordisk share prior to the release of accounts which are expected at around 8.00 a.m.
The ADR code for Novo Nordisk is NVO GZPFY.
Here are the quirks.
Jyske managers can buy overseas shares for US investors who have a managed account. If a US investor has an advisory account then ADRs must be used.
Non US investors can buy overseas shares but cannot have a managed account unless they have $250,000 minimum (versus $50,000 minimum for US investors).
Jyske has spent years and millions in legal fees to comply with the various regulations. Whoever thought government regulations would turn out to be anything but weird? This is how the rules work and keep in mind there are dual government regulations involved. Jyske has to comply with both US, Danish and in some cases a third set of requirements.
Inflation creates a problem for banks…a higher cost of providing good staff. This has forced many banks to raise minimum accounts. Jyske has taken a clever approach and set up graduated levels of service so they can still afford to serve even small investors.
This means that investors can start an advisory account for as little as $25,000.
Few, if any, overseas investment banks have minimums lower than this. Recently one banker was explaining that due diligence regulations now require five hours of account manager time just to open a simple account.
Managed accounts for US investors requires a $50,000 minimum. ($250,000 minimum for non US investors).
Investors who want riskier borrow low – deposit high leverage to create multi currency sandwiches need a minimum of $100,000 invested in an accounts so they can get sufficient diversification.
Accounts of $200,000 receive a premium-level service and accounts exceeding $1 million, receive the highest level of personalized service with the added ability to include hedge funds if desired.
For more details on how to buy multi currency investments at Jyske Bank and Jyske Global Asset Management contact:
US investors contact Thomas Fischer at email@example.com
Non US investors contact Rene Mathys at firstname.lastname@example.org
Protecting purchasing power from inflation will be the concern of most investors in the immediate years ahead. Multi currency diversification will be required. Multi currency banks are important because the global financial bailout creates predictable profit opportunities through multi currency diversification.
Merri and I love our farm in North Carolina…the rich green bursting in spring.
Lush ripeness in the summer.
And colors that burst forth in fall.
But yesterday the winds whispered in this snow this to me…
“Go South”…”Go South”…so soon…
These are the places I’ll be.
In Ecuador in the mountains…in the sun and on the sea.
Join us in the sun at one of our courses in Cotacachi Ecuador or on the beach this winter.
Learn more about economic safety this November. Join Merri, me, Steve Marchant, Kjetil Haugan or Thor Anderson of Vistazul and Peter Vestbirk Laub of Jyske Global Asset Management in Cotacachi Ecuador. We’ll review economic conditions, Ecuador real estate, my entire portfolio and investing and business ideas for the months ahead.
Nov 7-9 2008 International Investing and Business Made EZ Ecuador
Feb. 13-15 International Business & Investing Made EZ
See the wonderful balconies in the Primavera condos at for sale at $46,000 in Cotacachi.
Nov 10-11 Imbabura Real Estate tour
Feb. 16-17 Imbabura Real Estate Tour
Then travel to the coast. Enjoy the Vistazul swimming pool on Ecuador’s Pacific.
November 12-15, 2008 Ecuador Coastal Real Estate Tour; Quito Real Estate Tour
Enjoy Ecuador’s music.
Enjoy flowers and beauty.
Enjoy the friendly staff at our hotel.
Better still join us all year in Ecuador! See our schedule of 26 courses, tours, mingos and expeditions we’ll conduct in 2009.